P.Ramachandran, Madurai V. ACIT, Madurai

ITSSA 161/CHNY/2003

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8270 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-06-2011
• Assessment Year: misc
• Appeal Filed On: 21-07-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: V D GOPAL
• Keywords: Search and seizure; Opportunity of being heard; Source of fund; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B ENCH B C HENNAI BEFORE SHRI U.B. BEDI , J.M. AND SHRI N.S. SAINI , AM .. I.T .[SS]. A. NO. 1 61 /MDS/2 0 0 3 ASSESSMENT YEAR S 1988 - 89 TO 1997 - 98 P. RAMACHANDRAN NO. 2, SAPPANI KOIL STREET MADURAI VS. A.C.I.T INVESTIGATION CIRCLE III MADURAI (PAN NO. 3523 - R ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.D. GOPAL DEPARTMENT BY : SHRI ANIRUDH RAI O R D E R PER N.S . SAINI, A.M : - TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT (A) - I I , MADURAI DATED 31 . 0 3 .20 0 3 FOR BLOCK ASSESSMENT YEAR S ASSESSMENT YEARS 1988 - 89 TO 1997 - 98 . PAGE 2 OF 5 ITSS A. NO. 161 / MDS/20 0 3 2. THE COMMON GROUND RAISED IN THIS APPEAL IS THAT THE LD. CIT(A) SHOULD HAVE APPRECIATED THAT THE VERY ISSUE OF NOTICE U/S 158BD OF THE INCOME - TAX ACT, 1961 [IN SHORT, THE ACT] IS BAD IN LAW IN AS MUCH AS NO MATERIAL MUCH LESS INCRIMINATING MATERIAL WERE FOUND IN THE COURSE OF SEARCH OF THE BUSINESS PREMISES OF ASSESSE E S FATHER K. PRA MASIVAKONAR. FURTHER THEY RAISED THE GROUND THAT THE SPECIAL PROCEDURE CONTEMPLATED UNDER CHAPTER XIVB IS AN ASSESSMENT UNDISCLOSED INCOME BASED ON SEARCH MATERIAL AND IT IS NOT A REGULAR ASSESSMENT AND THAT THE LD. CIT(A) OUGHT TO HAVE A PPRECIATED THAT THE ASSESSEES HAD DISCLOSED ALL THEIR INVESTMENTS AND SOURCES OF INCOME IN THE REGULAR RETURNS OF INCOME FILED PRIOR TO THE DATE OF SEARCH AND THERE BEING NO MATERIAL TO ESTABLISH UNDISCLOSED INCOME OUGHT TO HAVE HELD THAT THE PROCEEDINGS U /S 158BD WAS VOID AB INITIO. 3. FURTHER, THE LD. A.R. OF ASSESSEE ALSO FILED AN APPLICATION DATED 20.10.2008 SEEKING PERMISSION OF THE BENCH TO RAISE THE FOLLOWING ADDITIONAL GROUND OF APPEAL: PAGE 3 OF 5 ITSS A. NO. 161 / MDS/20 0 3 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE 158B D ASSESSMENT MADE ON THE APPELLANT IS ILLEGAL AND BAD IN LAW IN AS MUCH AS NO SATISFACTION WAS RECORDED BY TH E OFFICER PASSING THE ASSESSMENT ORDER IN THE CASE OF RAIDED PERSON AND NO SEARCH MATERIAL WAS SEIZED RELATING TO THE APPELLANT IN THE CASE OF SEARC H OF THE PERSON RAIDED U/S 132 4. THE LD. A.R. URGED THAT THE SAID ADDITIONAL GROUND SHOULD BE ADMITTED AS IT IS A LEGAL GROUND AND GOES TO THE ROOT OF THE MATTER AND ALL THE FACTS FOR DECIDING THE ABOVE ADDITIONAL GROUND OF APPEAL ARE AVAILABLE ON RECO RD. HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT 289 ITR 341 [SC]. 5. THE LD. D.R. DID NOT OBJECT TO THE ADMISSION OF THE ABOVE ADDITIONAL GROUND OF APPEAL NOW RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL AND WHICH WAS NOT RAISED BEFORE THE LD. CIT(A). HOWEVER, HE SUBMITTED THAT THE ISSUE IN THE ADDITIONAL GROUND BE SET ASIDE TO THE FILE OF THE LD. CIT(A) FOR HIS ADJUDICATION AFRESH . 6 . AFTER CONSIDERING THE RIVAL SUBMISSIONS AND MATERIAL ON RECO RD, WE FIND THAT THE GROUND RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND AS TO THE SATISFACTION TO BE RECORDED BY THE ASSESSING OFFICER PASS ING THE PAGE 4 OF 5 ITSS A. NO. 161 / MDS/20 0 3 ASSESSMENT ORDER IN THE CASE OF SEARCHED PERSON THAT THE SEIZED MATERIAL BELONGED TO SOME OTHER PERSON AN D SUCH OTHER PERSON IS TO BE ASSESSED FOR INCOME IN THE SEIZED MATERIAL AND AS NO SUCH SATISFACTION W A S RECORDED, THEREFORE, THE ORDER PASSED U/S 158BC R.W.S 158BD OF THE ACT IS NOT A VALID ORDER, GOES TO THE ROOT OF THE ASSESSMENT, AND IS PURELY A LEGAL I SSUE WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. FURTHER, WE ALSO AGREE WITH THE SUBMISSION MADE BY THE LD. D.R. THAT AS THIS GROUND OF APPEAL WAS NOT RAISED BEFORE THE LD. CIT(A), THE MATTER SHOULD BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO ADJUDICATE THIS GROUND OF APPEAL. THEREFORE, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR DE NOVO ADJUDICATION OF THE ISSUE RAISED IN THE ADDITIONAL GROUND AS PER LAW AFTER ALLOWING REASONABLE AN D PROPER OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES . 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER COMPLETION OF HEARING ON 13 TH JUNE , 2011. PAGE 5 OF 5 ITSS A. NO. 161 / MDS/20 0 3 SD/ - SD/ - ( U.B.S BEDI ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 13 TH JUNE, 201 1 . VL / - COPY TO: ASSESSEE / AO / CIT (A) / CIT / D.R. / GUARD FILE